Growing list of billion-dollar crypto ‘unicorns’ suggest the best is yet to come
In the traditional investment world, the term unicorn is used by venture capitalists to refer to a private startup that is worth more than $1 billion.
These startups typically have strong fundamentals and often have a first-mover advantage, allowing them to quickly increase in value and become valuable investment opportunities for steel funds.
Among the most prominent unicorns are Elon Musk’s SpaceX, a privately held manufacturer of rockets and spacecraft valued at $46 billion, and Coinbase, the largest cryptocurrency exchange in the United States, currently valued at $8 billion.
While the world’s attention is focused on the coronavirus pandemic, the results of the 2020 US presidential election, and the recent r/Wallstreetbets social investment phenomenon, the cryptocurrency industry has quietly grown to a total value of over $1.2 trillion.
In addition, there are currently over 55 projects with unicorn status and a market capitalization of over $1 billion.
Top 18 projects by market capitalisation. Source: Messari
The recent evangelization of bitcoin (BTC) by the likes of Michael Saylor, Mark Cuban, and Elon Musk is helping to shine the spotlight on the burgeoning cryptocurrency sector, and with it the watchful eye of institutional investors who want to quickly see what other promising opportunities exist in this space besides BTC.
These projects are no longer just about making cryptocurrencies a global medium of exchange. Some of the best projects include smart contract platforms, decentralized financial protocols (DeFi), privacy tokens, oracle providers, and even humor-oriented membrane currencies.
With that in mind, here are some of the best crypto unicorn projects to keep an eye on as institutions begin to make their presence felt in the crypto currency markets.
Blue chip based projects
Bitcoin is the best pioneer in the crypto space because it paved the way for others and holds over 61% of the total market value with a current market capitalization of $843 billion.
As BTC is the longest chain with the strongest network of all cryptocurrencies used for validation, BTC is likely to be the first choice for new money entering the sector, requiring a cautious approach at first.
Percentage of total market capitalization. Source: CoinMarketCap
Just as many of today’s crypto believers have stepped into the space, bitcoin will be the gateway coin that introduces the concept and leads to further exploration.
Ethereum (ETH), with a current market capitalization of $196 billion, is the obvious second choice, as it is the most widely used smart contract platform and it is home to most of the largeFi protocols that have seen a surge in popularity in recent months.
Other legacy projects that have survived multiple bull and bear cycles to reach unicorn status include Litecoin (LTC), which has emerged as a credible alternative for transferring value for higher commissions and longer blockchain time, as well as the privacy-focused Monero (XMR) and Zcash (ZEC), which have paved the way for anonymity in blockchain transactions.
These projects currently have a market capitalization of $10.5 billion, $2.75 billion and $1.07 billion, respectively.
Decentralised funding is the key
Since the early 2020s, one of the main drivers behind the growth of the cryptocurrency industry has been the rise of decentralized finance.
Decentralized exchanges (DEX) like Uniswap have grown from a simple dApp exchange interface to a sprawling trading platform with an average seven-day trading volume of $6.72 billion, a figure that rivals that of the major central exchanges.
Uniswap 7 day trading volume. Source: Uniswap
The Uniswap UNI control token was originally given to users of the interface who took risks during the development of the protocol, but this token can now be found on all major centralized and decentralized exchanges.
The Protocol also received support in the form of risk capital to ensure its further development. With a current market cap of $5.9 billion and a token price of $19.79, Uniswap is likely on the watch list in this space.
SushiSwap, Uniswap’s main competitor, has also reached unicorn status with a current valuation of $1.8 billion. The platform provides a community-based system that allows token holders to participate in the management and receive passive income from the transaction fees generated by the protocol.
Total value locked in the FIG. Source: Pulse definition
Although DEX has contributed to the growth of DeFi, credit registries have emerged as the leading draw for total closed value (TVL) and higher token values.
Maker (MKR), AAVE and Compound (COMP) are the main platforms for measuring total slot level (TVL) in a protocol. Currently, the total value of smart contracts interacting with protocols is $15.63 billion and their market capitalization ranges from $2.1 billion to $5.98 billion.
In addition to the high return opportunities offered by rate protocols, retail investors are also attracted by governance features that give token holders a say in the future development of the protocol. These DeFi favorites are likely to attract long-term capital.
Contract smart readers with Ethereum congestion
Ethereum’s dominance over DeFi has proven to be contradictory, as increased network congestion has led to an unwarranted increase in rates.
Average price of Ethereum. Source: Etherscan
Recent record gas prices have opened the door for other smart contract platforms to meet the need for Tier 2 options and highlighted the need for Oracle vendors to securely transfer data between platforms.
Promising smart contract platforms that have emerged include Polkadot (DOT) and its sister network Kusama (KSM), which introduces interoperability with Ethereum and other leading blockchains as a solution to the current silos of individual networks.
DOT’s market capitalization has risen to $18.8 billion as the company’s visibility continues to increase. Kusama is a newcomer to the unicorn club, as its market capitalization just passed the $1 billion mark, and the 6. February appeared for the first time.
Interestingly, Cardano (ADA), one of the ICO-era projects of 2017, has also gained momentum in recent weeks after adding smart contracts to its protocol and hinting at more DeFi action.
Cardano currently has a market capitalization of $19.8 billion. The $2.5 billion in revenue and the integration of DeFi could help create value, as ADA has yet to benefit from the liquidity of decentralized exchanges.
Theta has the first-mover advantage when it comes to blockchain-based video streaming, and the project recently added smart contract functionality, the ability to create indecipherable tokens, and they launched Thetaswap DEX on the 4th. February.
Oracle joins theparty
As more and more players enter the crypto space and new niche blockchains emerge, connectivity between networks will be critical to the overall health and continued growth of the industry.
That’s where Oracle projects come in, providing reliable and secure ways to transfer data.
Top Oracle Projects. Source: CoinGecko
Chainlink (LINK) is Oracle’s first project in the area of protocol integration and evaluation. LINC currently has a market capitalization of $10.37 billion, and its recent listing on the Kraken exchange should add value to the project.
At the same time, startups like UMA and The Graph (GRT) have only recently reached unicorn status as the 2021 bull market heats up. These two projects have developed new methods for monitoring, recording and transmitting data and are estimated at $1.7 billion and $1.1 billion respectively.
GRT has been particularly active in the growth department, announcing numerous upcoming partnerships and integrations, including bridges to DOT and Binance Coin (BNB).
The unicorn herd will grow.
Bitcoin appeared on the financial scene over twelve years ago and has steadily gained a foothold that governments and the global financial system can no longer ignore.
With institutions finally starting to dip their toes into BTC and ETH, it’s time to take an even deeper look at what the emerging blockchain ecosystem has to offer.
The herd of unicorns is likely to grow, and since the decentralized financial sector is still in a very early growth stage, these unicorn projects have a lot of value.
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Cointelegraph.com. Every investment and every transaction involves risk. You should do your own research before making a decision.
frequently asked questions
Which crypto currency will grow the fastest in 2020?
something like 10 cryptocurrencies….
Which crypto currency is growing the fastest?
DeFi is considered one of the fastest growing crypto trends in the world, aiming to make things like insurance, credit and savings programs independent of banks. There is widespread confidence in the future of Ethereum and its ability to give users more control over their finances and data online.
What is the best altcoin to buy now?
Money is worth its weight in salt.
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